Relevance: GS-1: Role of women and women’s organization, Women’s Empowerment.

Key Phrases: NFHS–5, Financial Inclusion, Women’s Empowerment, Household Decision Making, Pradhan Mantri Jan Dhan Yojana, National Mission for Financial Inclusion, Women-Owned Houses, Reserve Bank of India, Digital Financial Services.

Why in News?

• Recently, NFHS–5 data shows that financial inclusion is bolstering women’s empowerment.

Background:

• In 2005-06 only 15.1 percent of Indian women had a bank or savings account that they themselves used. In 2016-17 the number of women using their bank accounts themselves went up to 53 percent and now as per the National Family Health Survey (NFHS-5) – 2019-21 about 78.6 percent of women in India have a bank or savings account which they operate themselves and not through male members in the family.
• The financial inclusion of women could be connected to the other empowerment parameters in the survey where women are prioritising their own needs and taking part in household decision-making.
• According to the World Bank, financial inclusion means that individuals and businesses have access to useful and affordable financial products and services that meet their needs—transactions, payments, savings, credit, and insurance— delivered in a responsible and sustainable way.

How financial inclusion is bolstering women’s empowerment?

• The NFHS–5 shows that financial inclusion might have bolstered the participation of women in household decision-making. Currently, about 88.8 percent of women usually participate in household decisions about health care for themselves, making major household purchases, and visit their family or relatives. In 2015-16 the percentage of women involved in this decision-making was 84 percent from the 76.5 percent in 2005-06.
• In 2015-16, about 38.4 percent of women-owned houses and/or land (alone or jointly with others). The NFHS–5 data shows that today 43.3 percent of women have a house and/or land.
• In 2015-16, only 57.6 percent of women used hygienic methods of protection during their menstrual period. As per the NFHS- 5 about 77.3 percent of women now use hygienic methods. Interestingly, only 48.2 percent of rural women used hygienic methods in 2015-16 the percentage today is 72.3 percent. This is a major indicator of how rural women are taking their own decisions. Earlier women depended on men for money even as they worked hard in the fields, today they handle their own money, say women in this village.
• The number of women having mobile phones that they themselves use has also gone up from 45.9 percent in 2015-16 to 54 percent in 2019-21.
• In 2005-06, about 37 percent of women experienced spousal violence, while in 2019-21, the number reduced to about 29.3 percent.

Challenges to Financial Inclusion:

• Financial Illiteracy is one of the challenges in the area of financial inclusion. Lack of basic education prevents the people to have access to financial services.
• Low-incomeme level is another challenging area in the process of financial inclusion because they think banks provide services only to the rich class.
• Due to difficulty in understanding formal languages, various documents, and many formalities in banking procedures people are not comfortable using financial services.
• Many people who live in remote localities find it difficult to reach the areas where banks are generally situated.
• Many people, who lack basic knowledge and education, do not know the importance of financial products like insurance, finance, bank accounts, cheque facilities which is also a challenge in the implementation of financial inclusion.
• However, certain critical gaps remain an impediment to financial inclusion, such as:
  • Inadequate infrastructure (in parts of the rural hinterland, far-flung areas in the Himalayan and North-Eastern Region).
  • Poor tele and internet connectivity in the rural hinterland.
  • Socio-cultural barriers.
  • Lack of market players in the payment product space.

Conclusion:

• RBI’s National Strategy for Financial Inclusion (NSFI) states that with greater control over their financial lives, women can help themselves and their families to come out of poverty, reduce their risk of falling into poverty, eliminate their exploitation from the informal sector, and increase their ability to fully engage in measurable and productive economic activities.

Source: The Hindu BL 

Mains Question:

Q. Discuss the role of financial Inclusion in bolstering women’s empowerment.